A coffee picker carries his crop in Central America, much of which has been hit by by a fungus known as roya. Photograph: Oswaldo Rivas/Reuters

Finca Hamburgo, at 1,250 metres above sea level, commands an uninterrupted view of 280 hectares of coffee plantations covering the verdant slopes of Tacana, a volcano in Chiapas state, southern Mexico. The damp heat there, close to the border with Guatemala, is ideal for growing Arabica coffee. But coffee rust – a disease caused by the Hemileia vastatrixfungus that spreads orange dust on to the leaves of coffee bushes – has infected the plantation, which has been operating for 125 years at Tapachula.

Jorge Perez, 20, sporting a red bandana, is hacking at infected bushes with a machete. "Dried out by the rust [roya in Spanish] almost all the leaves fall off," he explains. Employed on the farm as a day-labourer he and his wife crossed the border from Guatemala with a child of two to earn around $6.50 a day. Nearly half Hamburgo's plantations are affected by the loss of leaves.

According to farm manager Gustavo Salazar, who was the first to raise the alarm in October 2012, the infected bushes won't produce any fruit this year. "It's better to cut them back to strengthen them," he says. "Our previous crop, from September to February, did not suffer too much, but the next one could be 70% lower."

The fungus bleaches the leaves, preventing them from breathing. Arabica, the species most prone to rust, accounts for 97% of Mexico's 680,000 hectares of coffee plantations. "Here in Chiapas we have gone from 3,000 hectares infected in November to 45,000 now," says Ricardo Trampe, the head of the Tacana Regional Coffee Producers' Federation. Coffee growers in the western state of Veracruz, the second-largest production area in Mexico after Chiapas, reported the appearance of the dreaded fungus at the end of February.

The crisis seems particularly serious in Central America, with a state of emergency already in force in Honduras, Costa Rica and Guatemala. The epidemic started in Colombia in 2011, subsequently spreading to Central America then Mexico. The spores are carried by the wind, but also on the clothes of day-labourers moving from farm to farm.

Hemileia vastatrix was first observed in 1861 near Lake Victoria in east Africa. It appeared in Brazil in the early 1970s, then 10 years later in Mexico. "The fungus seems to be behaving more aggressively, less predictably, because it now affects plantations above 1,000 metres, whereas it used not to go above 800 metres," says Juana Barrera, an agricultural engineer at Colegio de la Frontera Sur.

Could climate change be playing a part in this trend? "Yes, because of the 1C or 2C rise in temperature in Chiapas in recent years," Barrera says. "But it's not the only factor. The age and upkeep of coffee bushes matters too. Half the bushes in Chiapas are over 20 years old and belong to varieties which are very prone to rust. Another associated cause is an increasing trend to plant in the open sun, to boost productivity, instead of the traditional method of placing bushes in the shade of other trees, offering better protection for an exceptional ecosystem."

In the past two years the Hamburgo farm has boosted output by moving two-thirds of the bushes into the sun. To combat the rust Salazar is going to adopt a new technique. "Fumigating the plantations with copper oxychloride is no longer enough," he complains.

A neighbouring farm, Irlanda, has been growing organic coffee on 250 hectares since 1929. The challenge here is even bigger, for until now they have never used chemical pesticides. "The solution would be to replant with a variety of Arabica more resistant to rust, but that would be too expensive," says manager Ernesto Solano. A third of the farm is already affected, but he is particularly concerned about what will happen in May with the start of the rainy season, favourable to the spread of fungus.

But those hardest hit are the small growers. "All our bushes have been infected," says Sonia Oseguerra, 62, who farms four hectares at an elevation of 1,450 metres with her husband. "It's our only source of income." Much like the Oseguerras, 98% of the 180,000 Chiapas coffee-growers own less than five hectares of land. Most are poor native Indians, according to the Mexican Association of Coffee Production (Amecafe).

"A major social crisis is hanging over us," says Rodolfo Trampe, the head of Amecafe. For the time being the authorities are spending $2m to assess the extent of the contamination. "We'll have the results in a month," says Francisco Javier Trujillo, the head of the plant disease department at the ministry of agriculture. "If the epidemic is confirmed we'll apply fungicides to stop it spreading beyond the affected areas. But any long-term solution involves disseminating better fertilisation practices," he says.

For three days in February, 150 experts from Mexico and Central America gathered in the town of Tapachula to exchange know-how and advice. But "how are we to train thousands of small coffee-growers who are widely dispersed, and can't afford to buy fertilisers or replace their old bushes?" Trampe asks. "We need to issue a phytosanitary alert, in order to obtain national and international funds for an emergency programme in partnership with Central American countries."